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Exclusivity

Exclusivity

Exclusivity is a clause in a commercial lease that prevents a tenant from opening a competing unit in a certain area. As an example, you decide to open a sub and pizza shop in a neighborhood strip mall. The mall is rather small, and there are only a dozen different stores in the building. You take the proactive approach and have the building's owner sign an exclusivity clause. At the time that you open your pizza joint, yours is the only one in the strip mall. You work hard and create a thriving business that is a favorite with the locals. After a few years, another entrepreneur sees your success and decides to open a pizza shop next to yours. You are in great shape because the exclusivity clause in your rental contract prevents another restaurant owner from selling pizza in the same strip mall where your shop is located.